Addition, subtraction, complication

Put together the mayor's various financial disclosure statements, and they don't add up.

In the beginning, it was a $140 problem. Today, in a growing conflict of complicated interests, Seattle Mayor Paul Schell's private companies have racked up $7,500 in business with the city since the mayor took office this year. One of the firms, a Bellevue security-systems company called Access Technology Integration (ATI), was not listed on the mayor's January public disclosure form and continued to do city business under Schell's part-ownership through April. In May, the mayor notified the Ethics and Elections Commission he had sold the company but did not reveal that ATI had earned $7,438 from the city. According to public documents, the company also did $22,500 in city business last year while Schell was a Port of Seattle commissioner, although in his new disclosure report the mayor inexplicably lists that figure as $14,835. (The mayor's office now indicates the $14,835 may actually be ATI sales to the Port.) This is one of several apparent errors on a financial report that fails to fully reflect Schell's intertwined public/private business dealings.

The $112,300-a-year mayor and multimillionaire developer/hotel operator says the conflicts are temporary as he attempts to untangle his interests. He's been an elected official for most of this decade, and his companies have often done business with federal, state, and local governmental agencies, sometimes in conflict: Two of his firms, for example, did $1,300 in security and parking-meter business with the Port last year, Port documents show. (New information indicates that total may be more than $16,000.) A Port spokesperson could not determine if Schell had disclosed those business connections while he was a commissioner. (When asked about the apparent conflict, a mayoral spokesperson had no comment.) The sales appear to be revealed for the first time in Schell's new report.

The mayor says he is not required to report his companies' most recent business with the city until his 1998 disclosure form is filed later this year. (The Ethics Commission was recently made aware of the ATI sales but will not say if it is reviewing the transactions.) Schell says his original city disclosure report filed in January was a copy of the report he filed as a Port of Seattle commissioner. As a commissioner, he was "required to report only sales made to the Port, not the city," he says.

ATI is a subsidiary of another Schell company, Pacific Cascade Corp. (PCC). Schell is co-founder, treasurer, and chair of the Vancouver, Washington, parking-lot equipment firm. As reported earlier (see "Million-dollar Mayor," SW 4/16), Schell provided $20,000 in parking services and equipment to Seattle Center last year and a minute amount—$140—in city services this year before the mayor asked his operating partner Mark Curtis to end PCC's city contract. His new disclosure report doesn't mention PCC's city sales last year or city transactions with a PCC subsidiary called DGM Systems. (In fact, Schell incorrectly lists PCC and DGM 1997 sales to the city as "none.") Yet he reports city sales for another of his companies, ATI (albeit incorrectly). Why the inconsistencies and omissions in the new report? Mayoral spokesperson Victoria Schoenburg says the transactions didn't have to be included at all, but the report does contain some "references to the city [sales] simply for the purposes of clarity and thoroughness." Go figure.

Schell says any conflicts are moot now: PCC has severed its city connection and its links to ATI. But conflicts linger. He remains 75 percent owner of PCC—which does more than $1 million in parking-equipment sales annually—and shares power with his wife, Pam, a board director. PCC and Schell's other companies continue to do business with government entities as well as private firms that have contracted with City Hall—Diamond Parking, Wright Runstad, and Washington Mutual, among others. In April, Schell's partner Curtis told us the mayor "does not receive a salary" from PCC. However, a May Seattle P-I story on the new disclosure report stated the mayor said he "now receives roughly $40,000 a year in director's fees" from PCC, while Schell's new disclosure report says he receives no more than $15,000 in such fees. OK, what's the mayor's true stake in the company? Spokesperson Schoenburg says, "The facts are that the mayor and Mrs. Schell each receive $6,000 a year—$1,500 quarterly—in director's fees from PCC. And a director's fee is different from a salary." It may be income, but, she adds, "Neither of the Schells are employees of PCC, and PCC does no withholding on their fees."

Either way, 1997 was a million-dollar year for the busy Port commissioner: According to his report and other documents, he earned just under $300,000 and sold more than $700,000 in property and businesses. His estimated worth is more than $3 million.

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